Extell Development’s acquisition of the Ring portfolio is considered one of Gary Barnett’s shrewdest plays. But it also made him some enemies.
In a massive $400 million lawsuit, the Chetrit Group’s Joseph Chetrit is suing both Extell and Barnett — accusing the developer and his firm of interfering in Chetrit’s bid for the Ring family’s valuable portfolio of Manhattan office properties.
Chetrit’s attorneys filed summons Friday in New York State Supreme Court, claiming Extell’s 2013 acquisition of the 14-building portfolio represented “tortious interference” with Chetrit and Joseph Tabak’s Princeton Holdings’ plans for a joint venture to manage the properties.
According to the filing, Princeton was supposed to close on a $112.5 million deal for Michael Ring’s interest in the portfolio before entering into the joint venture, which would “have the opportunity to develop, sell and/or lease more than 1.2 million square feet of prime New York real estate.”
But Barnett’s play to acquire Tabak’s contract on Michael Ring’s stake in the buildings “knowingly caused Princeton to breach its obligations to [Chetrit] and interfered with the prospective [joint venture]” between Chetrit and Princeton, the summons claims.
Extell eventually acquired Frank Ring’s stake in the portfolio, and has gone on to sell or ground-lease most of the properties, to the likes of the Kaufman Organization and Nathan Berman’s MetroLoft, for more than $700 million.
Chetrit is seeking a money judgment against Extell and Barnett “in the amount of no less than $400 million,” according to the filing. Neither representatives for Chetrit nor Extell returned requests for comment on the matter.
Chetrit previously filed suit against Tabak and Princeton Holdings in relation to the deal for the Ring portfolio in 2013 — claiming that Tabak’s deal to flip the contract on Michael Ring’s stake to Extell for around $65 million represented “fraudulent and deceitful conduct” on the part of Tabak and his company. That lawsuit is still ongoing.
Source: Real Estate